Poverty and Inequality – You Choose

The Straits Times (Singapore, Fri 14 Jun 2019) contained a commentary that asserted:

  1. “[…] many Singaporeans have mistakenly conflated poverty with inequality.”
  2. “Fundamentally, what matters to a poor person is how much money he has, not how much less money he has compared to Bill Gates. […] If inequality is all that matters, then the poor would be better off in Afghanistan and Thailand, which rank better than Singapore on Oxfam’s Inequality Index, but that’s hardly the case.”

I’m curious what reactions these claims elicit from readers.

Not everyone considers rigorous or credible that Oxfam study but the direction of that failure only strengthens the point. But whether or not one agrees with the other things that Commentary subsequently contained, the opening paragraphs held those two very concrete debatable propositions above.

For the record my own calculations show that between 1980 and 2010, average incomes of the poor (the bottom 50%)

  1. in the US fell by 1%;
  2. in Russia fell by 41%;
  3. In China rose by 221%;

at the same time that inequality (by pretty much every measure) rose in every single one of these large economies. Comparing 1988-1992 and 2012-2016 the top 1% in the US saw its income share rise by 8 percentage points; in Russia, by 21 percentage points; in China, by 11 percentage points. So, even when inequality increases, the poor can rise or fall in their actual incomes, depending.

Justin Ong. 2019. “The Fight is With Poverty, Not Inequality“, Straits Times (14 Jun)

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